Carbon Leakage Revisited Based on Carbon Terms of Trade

Released on by Banie Naser OUTCHIRI
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  • Carbon Leakage Revisited Based on Carbon Terms of Trade Book Detail

  • Author : Banie Naser OUTCHIRI
  • Release Date : 2022
  • Publisher :
  • Genre :
  • Pages : 0
  • ISBN 13 :
  • File Size : 96,96 MB
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Carbon Leakage Revisited Based on Carbon Terms of Trade by Banie Naser OUTCHIRI PDF Summary

Book Description: This paper seeks to contribute to the debate on the carbon leakage phenomenon via the channel of competitiveness leakage by focusing on China's bilateral trade. Based on a highly disaggregated database that includes 1,033 products and 117 trade partners from 1995 to 2012, we measure the environment-related trade performance with the Carbon Terms of Trade (CTT), whose time trends directly indicate whether China is gaining a comparative advantage in carbon-intensive products. Using a difference-in-difference model, we examine the Kyoto Protocol as an international climate policy quasi-natural experiment and ex-post evaluate its effect on China's CTT. Our results confirm that the Kyoto Protocol ratification has increased China's CTT by 26% (FE estimate, for the optimistic standpoint) or 47.3% (FE-IV estimate, for the pessimistic standpoint). Moreover, our results reveal heterogeneous effects of Kyoto-committed countries, depending on whether they have achieved their binding Kyoto targets. Thus, China's comparative advantage in carbon-intensive products has been strengthened by the Kyoto commitment or the achievement of Kyoto targets, which is consistent with the fact that the carbon leakage phenomenon has played a crucial role in China's international trade. The results have implications for both China's climate policy and for current and future international climate policies.

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